The prosecution at Liverpool Crown Court said Miss Hargreaves had been shot dead as a revenge attack against her boyfriend Gary Campbell.

Mr Campbell had been a passenger in a stolen car which hit and killed the four-year-old brother of Mr Downes in 1993. That, the prosecution claimed, was the motive for the murder.

'Cold-blooded'

During the four-week trial a jury at Liverpool Crown Court heard that the 22-year-old was shot three times at close range as she slept on a couch at her home in Lambourne Road, Walton.

Gordon Cole QC, prosecuting said: "It was an event conducted quite deliberately and in as cold-blooded a way as can be imagined."

The case doesn't meet the higher standard required for a jury to be allowed to reach a verdict on it

A spokesman for the Crown Prosecution Service

Miss Hargreaves was asleep on the living room sofa at the couple's home when three masked men armed with a sawn-off shotgun broke into the house in August 2005.

She was shot twice in the stomach and once in the head before the duvet cover she was sleeping under was covered in petrol and set alight.

Alongside the two men in the dock was Adam McNally, 18, of Townsend Avenue, Norris Green, who was cleared of burgling a house to steal a car in which the alleged killers fled.

A spokesman for Merseyside's Crown Prosecution Service, which charged the men and brought the case to court, said they believed there had been sufficient evidence.

The spokesman added: "This was a difficult and complex case. Following a review of all the evidence in accordance with the code for Crown Prosecutions it was decided that there was sufficient evidence to prosecute the case.

"However following the presentation of the prosecution case to court the judge has ruled that the case doesn't meet the higher standard required for a jury to be allowed to reach a verdict on it."